Merger of 2 Banks Detrimental to SSS, GSIS Members
What does a merger of two banks have to do
with members of the Social Security System (SSS) and the Government
Service Insurance System (GSIS)? A lot, according to two labor groups.
BY JHONG DELA CRUZ
Bulatlat
The so-called mall
magnate is increasing his economic influence by expanding his interests in
banking. Why are workers up in arms about his recent move?
Henry Sy, owner of
the ubiquitous SM malls, seeks to benefit most from the merger of Banco de
Oro Universal Bank, which he owns, and Equitable PCI Bank (EPCIB). Two
government financial institutions, the Social Security System (SSS) and
Government Service Insurance System (GSIS), maintain a significant share
in EPCIB.
Labor group Kilusang
Mayo Uno (KMU or May First Movement) warned that the merger, hatched by
Sy’s SM Group when it bought some 24.76 percent shares of EPCIB, would be
detrimental to the government and private sector workers who are members
of GSIS and SSS, respectively.
Confederation for
Unity, Recognition and Advancement of Government Employees (Courage) head
Ferdinand Gaite called the transaction an “ukay-ukay” (flea market) as SSS
sold its EPCIB shares at P56 ($1.09, based on an exchange rate of P51.26
per US dollar) per share, lower than the prevailing market price of P65
($1.27) per share.
KMU and Courage
stressed that selling SSS shares at lower prices could affect the benefits
given to members of SSS like retirement, education and health. They argued
that “volatile investments” such as this does not ensure income for the
government and that losses will be incurred at the expense of the workers
and their dependents.
“Inauspicious”
While KMU supports a
bill filed by Iloilo Rep Arthur Defensor that seeks to downscale
investments by SSS, KMU Chair Elmer Labog said, “The culprits behind these
unfavorable ventures should be investigated and held liable.”
Labog said that the
EPCIB and BDO merger would put at risk the invested funds of at least 25
million members of SSS, and 1.5 million members of GSIS. SSS has a
29-percent stake in EPCIB while GSIS has a 12.4-percent stake.
At present, SSS and
GSIS have five seats in the 15-person board of directors of EPCIB, while
Sy’s SM Group has two seats. A significant chunk is also owned by the
Romualdez family.
Volatile
Gaite said in the
event that Sy’s bank would take over the EPCIB assets, the government
could lose control of its assets due to unstable market forces.
GSIS President
Winston Garcia has floated its EPCIB shares for private bidding.
Reportedly, Garcia wants to buy Sy’s stake in EPICB and then sell it to an
interested investor to profit at least P4 billion ($78.03 million).
“Floating the
government funds in the market will not benefit the employees because
there is no guarantee in the market…knowing such an unstable condition,
the government could lose in this offering,” Gaite said.
KMU stressed the
possibility of widespread retrenchment once the merger pushes through,
given the capitalists’ “penchant for contractualization and unfair labor
practices.”
The group noted that
in 2003, BDO wanted to buy the P187.85 million ($3.66 million) shares of
SSS in EPCIB at P43.50 ($0.85), but was prevented from doing so due to a
case filed in the Supreme Court. Bulatlat
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